Yacht and Small Craft Surveys and Inspections

 A  Pre-purchase condition and valuation (C&V) survey is intended to  provide the buyer with the detailed information that they need to make  an informed purchase decision.  The survey report is often used as a  tool to negotiate specific repairs with the seller and/or a change in  the purchase price.  A Pre-purchase C&V survey report is also used  to satisfy bank and insurance company survey requirements.  At the end of the survey, a  debrief is conducted with the buyer to go over the survey findings and  to answer any questions while still on the vessel. 

A  Pre-purchase survey is a very thorough inspection of the hull and deck  structures; equipment and machinery; as well as fuel, plumbing and  electrical systems.  The survey typically takes three to six hours for  an average 30’ – 45’ vessel.  This includes inspection of the vessel  both out of the water and in the water, plus sea trial, on the same  day.  Operating systems and equipment are tested to determine if they  operate in a normal manner, including propulsion engines, AC generator,  air conditioning, galley equipment, electronics, etc.  The hull and  decks are inspected using hammer percussion soundings and moisture  meters to check for delamination of fiberglass composite laminates,  relative moisture in a hull bottom, and elevated moisture in structural  core materials.  The internal structures are visually inspected for any  signs of deterioration or failure.

The  engines are tested during a sea trial to check their wide open throttle  RPM ranges, cooling system temperatures and alternator outputs.  Oil pressure, Engine RPM, temperature and voltage is monitored using the vessel’s gauges.   Visual inspection is used to determine fluid levels, presence of leaks,  excess vibration, and exhaust smoke.

A Pre-purchase survey does not include: compression testing of machinery; oil analysis; internal inspection or  pressure testing of tanks; destructive analysis of hull and deck  structures; or invasive inspection of hidden spaces or inaccessible  areas.  Hardware and fastenings are not removed for evaluation.   Navigation instruments are not tested for accuracy.   Limitations of  inspection sometimes include an inability to test equipment and systems  that have been decommissioned for winter storage.  

It  is always the option of the buyer to have the engines and AC generator  further evaluated by a mechanic that is factory certified for that  specific equipment.  It is somewhat common and strongly recommended that  vessels such as motor yachts, sportfish, and trawlers with large diesel  engines have a separate mechanical survey due to the potential high  cost of repair of hidden engine problems.

Usually Insurance companies will require a survey every two years for older boats. An insurance survey consists of evaluating the vessels risk for insurance underwriters with particular focus on the structural integrity of the vessel, safety and suitability for the vessels use as well as determining the fair market value.  Essentially,  insurance companies are interested in data about the vessel that could  cause them to suffer financial loss.  So the main focus of the  inspection is on things that could cause the vessel to catch fire,  blow-up, sink, etc.  The information contained in an insurance C&V  survey report is not sufficient to make an informed decision regarding  the purchase of the vessel.  An  insurance survey typically takes between two and four hours to  complete.  The presence of the owner is not required but is encouraged.   Whether the vessel is inspected in the water or out of the water is at  the discretion of the insurance underwriter.  Vessel’s over 20 years old  are often required to have an out-of-water survey. The  vessel’s fair market value is developed using assumptions about the  condition and serviceability of the engines and equipment.  If the  survey is conducted with the vessel in the water, assumptions are also  made about the condition of the hull bottom, through hull fittings,  running gear, keel, etc.

Marine surveyors are often called upon to undertake damage surveys and  to report on the damage claimed under a hull & machinery policy.   Typically the surveyor is hired by the insurance company to investigate claims made  by their insureds or by claimants.  Sometimes a surveyor is hired by a  boat owner to investigate unusual deterioration or damage, especially on  newer boats. The purpose of a Marine Damage Survey is to assess the extent of the  damage sustained by the hull, rig, systems, or elsewhere on the vessel.  The report presents information on the probable causes of the damage,  recommendations on repairs, and estimates the costs for such work.  

 Some of the typical types of damage investigations include:       

• Boat Trailer Accidents
• Leaking Fuel Tanks
• Fire / Arson
• Pollution Mitigation
• Severe Weather
• Sinking
• Collision
• Allision 
• Groundings
• Striking Submerged Objects
• Mechanical Problems 

 A damage survey report typically includes: 

• Reported circumstances of the damage
• Statements from owners, operators and witnesses
• Identification and description of the vessel and its condition
• Description of damages 
• Opinion as to the cause of loss
• Review of repair estimates for reasonableness
• If no estimates, Preparation of a Damage Appraisal 
• Pre-Loss and Post-Loss valuation of the vessel

These are used for financing, estate and divorce settlements, and donation of  vessels to charities.  Professional marine surveyors are recognized by  the IRS, courts, banks and insurance companies as boat and yacht  appraisers within their area of expertise.